Bayer Expanding Presence In Oncology Treatment Market

Bayer is expanding its presence in oncology and will enter the androgen receptor antagonist market in 2019.

The prostate cancer market is gaining momentum with a number of novel drugs entering the market, but genericisation of Zytiga will place pressure on newer drugs.

Bayer will undertake further deals to expand its cancer portfolio.

Bayer is rapidly continuing its oncology expansion. The company's Phase III ARAMIS (Androgen Receptor inhibiting Agent for MetastatIc-free Survival) trial that investigated darolutamide in men with non-metastatic castration-resistant prostate cancer (nmCRPCA) has met its primary endpoint. Darolutamide significantly extended metastasis-free survival (MFS) compared to placebo. The safety profile and the tolerability of darolutamide observed in the ARAMIS trial were consistent with previously published data on darolutamide.

The prostate cancer treatment market is set for change. Prostate cancer represents a sizeable opportunity; in 2018, an estimated 1.2mn men will be diagnosed with prostate cancer, and about 358,000 will die from the disease worldwide. Prostate cancer is the fifth leading cause of death from cancer in men. Since 2010, numerous drugs have received approval: Johnson & Johnson's Zytiga (abiraterone acetate), Sanofi's Jevtana(cabazitaxel); Astellas Pharma/Medivation (Pfizer)'s Xtandi (enzalutamide); and J&J's Erleada (apalutamide). After the launch of Zytiga, J&J quickly took a leading share of the prostate cancer market. However, the launch of Xtandi in 2013 placed pressure on J&J. Zytiga has lost market share in the US to Xtandi while still recording increasing sales; however, this has been offset by further growth outside of the US. A number of ANDAs have been filed for Zytiga, and these have initiated a patent challenge. Zytiga is currently protected by one patent listed in the FDA's Orange Book: US Patent No. 8,822,438, which is scheduled to expire on August 24 2027, but has been deemed invalid in the US; J&J will appeal this decision. J&J is building a prostate cancer franchise with the 2018 approval of Erleada,which will be a significant competitor for Xtandi, as it does not have the same limitations as Zytiga. Despite this, Erleada is not expected to reach the same heights as Zytiga; notably, the genericisation of Zytiga will have an impact on growth potential of Erleada, Xtandi and other novel approvals.

Xtandi To Maintain Leadership

Selected Prostate Cancer Drug Revenues (USDmn)

e = estimate. Source: Bloomberg, Fitch Solutions

Bayer is heading towards a crowded market. Darolutamide is an investigational, oral androgen receptor (AR) antagonist developed jointly by Bayer andOrion. Bayer plans to discuss the data from the ARAMIS trial with health authorities regarding the submission of a new drug application. Bayer has been granted fast track designation by the FDA for darolutamide in men with nmCRPCA. This will place it in direct competition with Erleada and Xtandi, and this will provide challenges for darolutamide to gain significant market share against established players in the AR antagonist market.

Bayer is extending its oncology portfolio. Bayer's currently marketed oncology portfolio contains four drugs, Nexavar (sorafenib), Stivarga(regorafenib), Xofigo (radium Ra 223 dichloride) and Aliqopa (copanlisib). Nexavar revenues are declining, Stivarga has struggled to maintain growth, Xofigo sales are accelerating and Aliqopa is newly approved. Nexavar sales are stalling due to competitive pressures in the US, and Stivarga may provide relief as it is approved for further indications, despite revenue declining in 2016 due to competitive pressures, the product has since returned to modest growth. The strength of these core products will enable Bayer to build a significant cancer portfolio.

Bayer is also undertaking deals to bolster its presence in the oncology market. In 2017, Bayer acquired Loxo Oncology, which saw Bayer acquire a late-stage oncology asset, larotrectinib, that has since been filed with the FDA. Bayer will likely undertake further deals to bolster its oncology pipeline, a trend seen across the wider pharmaceutical market.